Issue Iss3 2011
A meaty prospect
Norwegian meat company Fatland’s low margin and high quality concept gets its latest boost with the implementation of new processing facilities
As the biggest privately owned meat company in Norway, Fatland has been a integral force in the country’s meat industry since 1892. It was at this time that the business was founded by Rasmus Fatland, and it has remained in the family’s ownership ever since. Fatland is a fully integrated business handling all aspects of the slaughtering process from initial planning to deboning and processing for delivery. With over 100 years legacy to its name, Fatland’s operations have developed somewhat over this time with a particular focus in the last 20 years on increasing its direct supply to Norway’s biggest supermarket chains.
Compared to other markets, Norway is rather special in its closed nature, which means there are limited opportunities to do business with other European Union (EU) countries. Whilst government legislation makes it possible to import some meat carcasses at times of seasonal drops in supply, the country’s goal is to reach 100 per cent production of its own meat, poultry and milk requirements. Therefore much of Fatland’s competition comes from within the country itself.
Terje Wester, CEO for Fatland AS (the Fatland Group of companies) elaborates: “Over the last few years we have worked very hard to become a company that is capable of meeting production for Norway’s national market. The problem in Norway is that in the 1990s a lot of processing plants were too small to operate nationally so they only covered a particular region. This meant that when the supermarkets went nationwide and required larger producers to supply them with a wide range of products, few companies were able to achieve this. Over the last 20 years though, Fatland has successfully positioned itself as a national supplier, which is vital to the 5000 farmers we work with.”
However, despite Norway’s closed nature, Fatland has found opportunities on an international scale for the export of its meat products. This area of thebusiness is handled through subsidiary trading company Fatland Meat AS, and has been boosted in recent years by the growth in China’s economy. Often these products are those that are no longer in demand in Norway, but still have a market in countries like China, West Africa, and Japan.
At the heart of Fatland’s operations are its four slaughterhouses and meat processing plants, which have a combined annual capacity of 40,000 tonnes of meat – Fatland Ølen, Fatland Oslo, Fatland Sandefjord, and Fatland Jæren. The latter is not only the Fatland group’s largest slaughterhouse but also the largest private slaughterhouse in Norway. It is located in the middle of Jæren, Norway’s main meat region, with facilities for the processing of cattle, pigs, and lambs. Throughout its lifetime, the plant has been expanded many times in order to increase the production capacity, with its most recent investment having recently taken place: “As a family owned business, we have a very long-term view and our owners are keen to invest as much as possible into developing the business,” begins Terje.
He continues: “This is not only to develop new products and increase the quality of those we already offer, but also to invest in new production and processing lines. At Fatland Jæren we have made a substantial investment into new curing facilities, specifically for the production of pinnekjøtt – a dried lamb ribs foodstuff that is very popular in Norway over the Christmas season. In preparation for this we looked at Parma ham production and equipment, and implemented the best aspects of this into our cured meat line to deliver high quality at low costs.” This quality is something that Fatland strives to deliver at each of its plants – all of which are certified in accordance to British Retail Consortium (BRC) standards.
Other investments include the implementation of a new frying line at the Fatland Ølen plant, and new tooling and slaughtering facilities at Fatland Oslo to cope with recent growth in intake. Alongside the slaughter and processing of meat, since the 1990s Fatland has also operated a number of subsidiaries focused on the processing of animal by-products – Fatland Hud og Skinn (Hide and Fur), Fatland Ull (Wool), and Miljøfor Norge, which produces animal feed. This move was designed to not only responsibly use the by-products of slaughtering, but also to strengthen the economy of the Group, which is then translated back into the best possible prices for the farmers.
In fact cost is one of the biggest challenges that Fatland, and other food producers, face due to the high price of farming in Norway. Therefore the Group is continuously looking at ways to lower its overheads and deliver reduced margins. “I believe that the low margins expected by the Norwegian meat industry to continue someway into the future,” explains Terje. “As such, whilst we intend to continue to grow each year, it is also important that we invest in better equipment and plants so that we improve our products, whilst keeping costs down. In the past we have acquired several other companies, but over the last 15 years we have been committed to expanding our established businesses through gaining greater market share each year. This remains our strategy for the future, in conjunction with working closely and evolving with our customers.”